There is an entire industry that has sprung up around these folks who are aging and yet cannot leave the workforce.

Is this going to be you? Or your siblings? Or your parents?

I hope not.

I hope it’s not going to be me, either. Though, I know nothing is ever guaranteed.

So, I’m giving you one task today. Just one. If you do not currently have a Roth IRA set up (no I’m not counting 401Ks or employer provided retirement accounts – I’m talking your own, individual retirement account) I want you to start one.

This takes less than 15 minutes to do. You can put in a very small amount to start and build your way up to investing, but it’s something you can do today.

Setting it to auto deposit even $50 a month (one night out to eat?) can have a huge impact on your financial future! The most you can put into a Roth IRA is $5,00 a year, but I think sometimes people feel that if they’re not maxing it out, it’s not worth it.

I’m here to tell you it IS worth it.

Let’s run the numbers real quick and then you tell me if it’s worth it or not.

If all you put in was $50 a month for the next 30 years and you got a 7% return on your investment, you’d still have $19,000 more than you have today. That’s something, right?

Year

Starting #

Yearly Contribution

Total

Interest 7%

1

$0.00

$600.00

$600.00

$642.00

2

$642.00

$600.00

$1,242.00

$1,328.94

3

$1,242.00

$600.00

$1,842.00

$1,970.94

4

$1,842.00

$600.00

$2,442.00

$2,612.94

5

$2,442.00

$600.00

$3,042.00

$3,254.94

6

$3,042.00

$600.00

$3,642.00

$3,896.94

7

$3,642.00

$600.00

$4,242.00

$4,538.94

8

$4,242.00

$600.00

$4,842.00

$5,180.94

9

$4,842.00

$600.00

$5,442.00

$5,822.94

10

$5,442.00

$600.00

$6,042.00

$6,464.94

11

$6,042.00

$600.00

$6,642.00

$7,106.94

12

$6,642.00

$600.00

$7,242.00

$7,748.94

13

$7,242.00

$600.00

$7,842.00

$8,390.94

14

$7,842.00

$600.00

$8,442.00

$9,032.94

15

$8,442.00

$600.00

$9,042.00

$9,674.94

16

$9,042.00

$600.00

$9,642.00

$10,316.94

17

$9,642.00

$600.00

$10,242.00

$10,958.94

18

$10,242.00

$600.00

$10,842.00

$11,600.94

19

$10,842.00

$600.00

$11,442.00

$12,242.94

20

$11,442.00

$600.00

$12,042.00

$12,884.94

21

$12,042.00

$600.00

$12,642.00

$13,526.94

22

$12,642.00

$600.00

$13,242.00

$14,168.94

23

$13,242.00

$600.00

$13,842.00

$14,810.94

24

$13,842.00

$600.00

$14,442.00

$15,452.94

25

$14,442.00

$600.00

$15,042.00

$16,094.94

26

$15,042.00

$600.00

$15,642.00

$16,736.94

27

$15,642.00

$600.00

$16,242.00

$17,378.94

28

$16,242.00

$600.00

$16,842.00

$18,020.94

29

$16,842.00

$600.00

$17,442.00

$18,662.94

30

$17,442.00

$600.00

$18,042.00

$19,304.94

And if you did manage to max out that Roth IRA?

Year

Starting #

Yearly Contribution

Total

Interest 7%

1

$0.00

$5,000.00

$5,000.00

$5,350.00

2

$5,350.00

$5,000.00

$10,350.00

$10,867.50

3

$10,350.00

$5,000.00

$15,350.00

$16,117.50

4

$15,350.00

$5,000.00

$20,350.00

$21,367.50

5

$20,350.00

$5,000.00

$25,350.00

$26,617.50

6

$25,350.00

$5,000.00

$30,350.00

$31,867.50

7

$30,350.00

$5,000.00

$35,350.00

$37,117.50

8

$35,350.00

$5,000.00

$40,350.00

$42,367.50

9

$40,350.00

$5,000.00

$45,350.00

$47,617.50

10

$45,350.00

$5,000.00

$50,350.00

$52,867.50

11

$50,350.00

$5,000.00

$55,350.00

$58,117.50

12

$55,350.00

$5,000.00

$60,350.00

$63,367.50

13

$60,350.00

$5,000.00

$65,350.00

$68,617.50

14

$65,350.00

$5,000.00

$70,350.00

$73,867.50

15

$70,350.00

$5,000.00

$75,350.00

$79,117.50

16

$75,350.00

$5,000.00

$80,350.00

$84,367.50

17

$80,350.00

$5,000.00

$85,350.00

$89,617.50

18

$85,350.00

$5,000.00

$90,350.00

$94,867.50

19

$90,350.00

$5,000.00

$95,350.00

$100,117.50

20

$95,350.00

$5,000.00

$100,350.00

$105,367.50

21

$100,350.00

$5,000.00

$105,350.00

$110,617.50

22

$105,350.00

$5,000.00

$110,350.00

$115,867.50

23

$110,350.00

$5,000.00

$115,350.00

$121,117.50

24

$115,350.00

$5,000.00

$120,350.00

$126,367.50

25

$120,350.00

$5,000.00

$125,350.00

$131,617.50

26

$125,350.00

$5,000.00

$130,350.00

$136,867.50

27

$130,350.00

$5,000.00

$135,350.00

$142,117.50

28

$135,350.00

$5,000.00

$140,350.00

$147,367.50

29

$140,350.00

$5,000.00

$145,350.00

$152,617.50

30

$145,350.00

$5,000.00

$150,350.00

$157,867.50

C’mon now? Who wouldn’t want an extra $150k to help pad their retirement savings? And while 5k a year sounds like a lot, $416 a month does not. $96 a week sounds like even less.

And if you’re side hustling anyway, that extra money could and should go into your Roth to help build those retirement funds! Or if you’re job hunting with OneSheet and you do end up with a higher paying gig, you need to put that extra money aside and not give into the lifestyle creep!

If you only do one thing for yourself this weekend – set up that Roth. It’s easy. It take 15 minutes of your life. And you can set it and forget it.

I’ll delve into Roths in more detail next week, but you can do it. I know you can!

1 Response

Heads up, a couple of mistakes in the article. First is a typo I think… $5500/yr max. But the table has that error too. Also, the table isn’t calculating correctly, I think. You say you have ~$157k after 30 years, but that’s essentially just the contributions made over that time ($5k x 30 = $150k). The correct calculation should of maxing ($5.5k/yr x 30 w/ 7% int) gets you to about $556k… A much more worthwhile trade-off.

About The Basic Bitch

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